Entrepreneurs and Franchisors Watch Out

New Franchisors and Entrepreneurs need to watch out as they enter into the world of franchising. What advice can I give to a new franchisor, I was asked today by another entrepreneur with a wonderful new concept; what are the tiger traps that lay ahead?

So you are a new franchisor? Who can you trust? Can you trust FranData? The Industry's information source was thought to be a friend, is it? Well they can get you on a list so that SBA Loans for your new franchisees go smoothly. But after you send them your UFOC, which you most likely paid some $35,000 to an over paid boilerplate bandit attorney to create, they will turn around and sell it to your competitors. See for yourself:

https://www.frandata.com/frandata/cart/prod_IR.aspx?screenwidth=800

And if you choose to give out earning claims to prospective buyers, based on current franchisees sales, then they too will sell this to all your competitors also, both non-franchise competition and franchise competition which may have stores nearby or even next door to your current franchisees, thus putting your franchisees at a disadvantage as well as your own growth in the market. Remember the key to franchising growth is watch the cash and build brand name:

http://www.frandata.com/productofmonth.aspx?screenwidth=800

This is our wonderful Franchise disclosure laws at work, taking the small entrepreneur's information and life's work and selling it to your larger competitors who do not want you in business at all. Our government seems to think this helps consumers? Well it helps competitors put you out of business, so watch out. It helps competitors destroy your franchisees and therefore hurts those franchise buyer consumers. And even worse to the parent company, the franchisor, by giving information which is available to overseas competitors who want to know exactly how well your units perform so they can compete with you head to head in all of the other non-US markets? Great? Do you think for one minute that those overseas governments would make their companies give data that we could get? I don't think so.

We in the United States are continuously put at a competitive disadvantage in this country by government mandatory disclosure and FranData wants to get your data out faster to those same competitors and makes money doing so. This is how FranData can help your business grow? Give me a break. In 1997 at the annual IFA conference in Las Vegas, I met the former owner of FranData who was able to make a deal with the SBA to develop a registry. He was a black guy and I can only assume his minority status was used to get him this exclusive coup. Must be nice to be a minority and do government contracts. Then he started collecting UFOCs, Financial data, franchise profiles and then started selling these to attorneys who may wish to sue these companies and or call up all your new franchisees and ask them to join in a class action law suit. And to your competitors. FranData's Rational for doing this? They say it is public data, anyone can get it. That is not entirely correct, not just anyone can get it, especially if you are smart enough to fly under the radar a little. There are strategies for this and it is advised. Now then any foreign competitor in Thailand, Singapore, Malaysia, Taiwan, China, Philippines, Australia, Europe, UK, Middle East (great possible International Terrorists can buy data from FranData, is this true?), Canada, etc. can find out everything about your company. Everyone knows these UFOCs contain more data than anything on your company computer or in your trashcan. I got a call from FranData, which has been bought by National Cooperative Bank;

http://www.ncb.coop/

Great now we have a bank, which funds your competitor's franchisees, which has all your data on your new franchise to sell to your competitors. In this phone call the caller said that they could help our franchise company with publicity? Well, luckily we need no publicity:

http://www.carwashguys.com/innews.html and

http://www.carwashguys.com/history/museum1.shtml

The caller purported to be working on setting up a 50 Fastest Growing New Franchise Concepts for Franchise times:

http://www.franchisetimes.com/

Which is an industry newspaper, which is rarely read by the potential consumer franchise buyers, but rather your Competitors also. The Franchise Times has come and gone. Stops printing for a while and is then revived. It seems as a new franchisor you must guard your data and business model with passion or you will find all your trade secrets printed in national magazines and your corporate data in the hands of competitors who will go to any length to attack your company and your new franchisees. Think on this.